(DIGI MK/HOLD/RM4.90/Target: RM5.15)

Digi reported a 12% yoy and 4% qoq decline in 2Q17 core net profit to RM358.9m. This brings 1H17 core net profit to RM732m (-9% yoy) and we deem the results to be below our and street estimates. While the group continues to display good cost discipline, higher depreciation and interest cost weighed down on relatively stable EBITDA trend. We reduce 2017-18 core net profit forecasts by 5% and 4% respectively. Maintain HOLD and trim target price to RM5.15. Entry price: RM4.65.

Source: UOB Kay Hian Research - 13 Jul 2017